Trouble Brewing for Beer Sales in Western Recreational Marijuana States

If Bud’s for you, beer may not be.

That seems to be the upshot of a new report by the craft-brew biz focused website brewbound.com, which found that beer sales dropped in Colorado, Oregon and Washington over the past two years.

Citing a market report from communications firm Cowen & Company, they note that beers sales dropped 2.4 percent overall with premium domestic brews (Bud Light, Coors Light, etc.) down 4.4 percent. Diving deeper into the numbers, even the trendy craft-brew market has seen some turbulence with decelerating growth after years of rapid increases.

As recently as last year, beer and weed seemed to be coexisting in the market nicely, according to an AP report that found 2015 sales unaffected by the new normal of legal cannabis out west.

But this year, Cowen & Company’s senior industry analyst for cannabis, alcohol and tobacco Vivien Azer observes that “While [marijuana] retail sales opened up in these markets at different points of time, with all three of these states now having fully implemented a retail infrastructure, the underperformance of beer in these markets has worsened over the course of 2016.”

The Denver market seems to be getting hit hardest with total beer volumes down 6.4 percent year-to-date and craft brews down 5 percent, which is surprising given the rise of marijuana tourism in Colorado that could be expected to boost hospitality spending across the board. In fact, the only beer category so far seemingly immune to the pro-cannabis trend is imports, with higher-end consumers apparently gripping their brewskies a little bit tighter.

Perhaps most worrisome for the big brew conglomerates is that marijuana-favoring millennials are driving the change, trading beer glasses for bongs in increasing numbers.

“This is perhaps not surprising,” says Azer, “given that U.S. government data for the states of CO, WA and OR all show consistent growth in cannabis incidence among 18-25 year-olds, coupled with declines in alcohol incidence.”

With beer sales taking a little hit, it might be time for nervous beer execs to take one of their own—and prepare for the inevitable challenges ahead. In other words, big-time beer bros, just spark one up and chill.